BA launches court action to lift Amex ban on ticket sales

British Airways has gone to court in New York in an attempt to stop American Express barring passengers from paying for BA flights using their Amex charge cards.

The legal dispute centres around a decision by BA to stop paying a fee to American Express every time business customers use their corporate Amex cards to buy discounted fares. American Express claims the move breaches its merchant agreement with BA and has responded by threatening to prevent BA from accepting Amex cards as payment for any tickets.

Neither BA nor American Express would disclose the commission charged for each card transaction. Nor would BA say how many of its passengers paid with Amex cards or the number of discounted fares bought by corporate customers.

However, in its filing with the New York District Court, BA said that it would suffer "severe financial harm" if it could no longer accept Amex cards as payment. BA also claimed that it would experience "extraordinary disruption" and have to launch a "massive worldwide effort" to alter the way customers and travel agents paid for tickets.

The decision to stop paying commissions to credit and charge card issuers on certain fares came out of BA's future shape and size review earlier this year which identified cost savings of £600m which the airline could make. A BA spokesman pointed out that all other credit card and charge card issuers such as Visa, Mastercard and Diners Club had agreed to the change in policy.

BA also stressed that, nothwithstanding the dispute with American Express, it continued to accept Amex cards as payment for all published fares in the UK. Although the court action is being heard in the US, the dispute only relates to tickets bought on Amex in the UK.

An American Express spokesman, Michael O'Neill, described BA's legal move as "frivolous" and added: "Our view is that British Airways is simply trying to pass along certain costs to travel agents and ultimately their customers."

American Express has said it will terminate its agreement with BA in 30 days. BA's lawsuit, which was filed on Monday, is aimed at preventing American Express from doing that.

It is thought that BA would be prepared to continue paying a fee per booking to American Express provided the amount was smaller.

American Express said it was keen to settle the dispute so that BA passengers could use its card to pay for all fares offered by the airline.